Sunday, November 25, 2012

Power constraints hinder Ayensu operations

The Ayensu Starch Factory’s major challenge is the issue of sustainable, adequate power supply to sustain production and meet supply targets, the Minister for Trade and Industry, Ms. Hanna Tetteh, has disclosed. 

“I will admit that the company is having some challenges and that the major challenge is the stability of access of energy because of where it is located -- Bawjiase -- in the Central Region.

“Even though we’ve tried to work on this for a while, there is still a case with the issue of power supply. This power supply problem has created some problems for production, but we also feel that this is a particular business that can do better,” she said.

The factory was inaugurated in February 2004 under the Presidential Special Initiative (PSI) on cassava. It was established to create market for cassava growers, develop cassava into starch and its allied products, and create job avenues for the youth.

As part of a revamping strategy, the factory has achieved success in organising the cropping of 3,000 acres of cassava to feed the factory for starch production.

The company’s nucleus farm operation has offered jobs to about 300 youths within the project’s catchment area, and this number is expected to increase when production peaks.

Ms. Tetteh, speaking at the Ministry’s meet-the-press session in Accra, said:”The Ministry has been pursuing the agenda of government which focuses on export-led growth based on the fact that Ghana has a small market in terms of size and purchasing power.”

She said economic growth can therefore be achieved through increased international trade by improving the competitiveness of local industries and promoting the country as a preferred business destination.

“In a bid to achieve these objectives, the Ministry since January this year has commenced the implementation of the prescriptions in the new industrial policy and its sector support programme to enable manufacturing companies take advantage of the achievements of the Trade Sector Support Programme (TSSP) derived from the Trade Policy, which officially ended in December 2010.”

She said the TSSP focused on improving the business environment, and the industrial sector support programme seeks to address supply constraints and to improve the competitiveness of manufacturing companies.

The Rural Enterprises Programme, she said, is also one of the key projects under the Ministry with an overall goal of contributing to the improvement of the livelihoods and incomes of the rural poor and micro- or small-scale entrepreneurs.

Friday, November 16, 2012

October inflation falls to 9.2%

Headline inflation slowed marginally in October according to the Ghana Statistical Service, sliding to 9.2 from 9.4 percent in the month of September. 

The drop is the second consecutive fall in inflation since August, and was due to the stability of the cedi and prevailing seasonal conditions resulting in abundant food supply.

Government Statistician Dr. Philomena Nyarko, speaking at a media conference in Accra, explained: “The main drivers of the downward trend are the food items. We are seeing a reduction in the prices of food items because of the harvesting season. The months of August, September and October are the months that [usually] show low inflation.

“Also, the cedi has remained stable; it has actually appreciated slightly against the major currencies,so that is why we are seeing this downward trend.”

The GSS said both food and non-food inflation eased in October, with food inflation slowing from 4.4% to 4.1% and non-food inflation from 12.4% to 12.2%. 

Meanwhile, the policy rate-setting committee of the Bank of Ghana on Wednesday held its prime interest rate unchanged at 15 percent, marking its third consecutive decision to hold the rate steady since June.

This indicates that the rate at which commercial banks borrow from the Central Bank will remain the same for the rest of the year.

Acting Governor Dr. Henry Kofi Wampah explained that the improved exchange rate and inflation rate remaining in the single-digit band triggered the decision by the Central Bank to maintain the policy rate.

At the regional level, the inflation rate ranged from 6.6 percent in the Volta Region to 11 percent in the Central Region.

Apart from Central, Ashanti and Greater Accra, the Northern Region also recorded rates above the national average of 9.2 percent.

MASLOC to support value-production with GH¢68m

The Microfinance and Small Loans Centre (MASLOC) is to disburse GH¢68million in loans next year to support value-chain production activities in the agro-processing and fishing sectors.

The Centre between August 2010 and August 2012 disbursed approximately GH¢34million in microcredit facilities directly and indirectly to about 71,000 beneficiary groups and individuals.

Mrs. Bertha Ansah-Djan, Chief Executive Officer, told B&FT in an interview that the Centre will continue to provide microcredit facilities to small businesses, especially women, to accelerate employment creation and income generation.

“The Centre will vigorously pursue fish-farming activities to encourage farmers to set up hatcheries for the production and breeding of fingerlings. MASLOC will provide support to economic activities in the agro-processing sector to make them viable and sustainable,” she said.

“We have tackled almost all the areas we are supposed to: such as food crop production, agro-processing, poultry, livestock, fishing, and farming inputs. We have also supported the school-feeding programme by providing funds for the women who have been contracted to feed the children. This is better than them going elsewhere to get loans.”

She added: “We have also become a centre that government comes to when there is a disaster like a flood, and we go there to support victims.”

“MASLOC’s management has prudently managed the funds allocated to the Centre in 2012.
“We are almost through streamlining MASLOC, and it is now doing what it is intended to do; that is, helping more medium enterprises to get funds.”

The Centre mainly targets the productive poor and vulnerable in society -- including women, the physically-challenged and the youth who are engaged in micro- and small-scale businesses -- to reduce poverty and create employment and wealth.

Explaining the Centre’s recovery rate, Mrs. Ansah-Djan said: “The new management adopted a multi-faceted loan recovery and prudent approach to salvage the old loans -- which has yielded a 99.5 percent recovery rate. Management is committed toward sustaining the recovery efforts.”

She disclosed that its new scheme -- which seeks to partner a company that is ready to fund the cost of farm inputs, agro-processing machineries and sewing machines for hire purchase by qualified beneficiaries -- has yielded positive results.

MASLOC was created under the Office of the President with the objective of supporting government’s programme of sustainable poverty reduction as indicated in the Growth and Poverty Reduction Strategy. It provides micro-credit and small loans to the productive poor of the population.

MASLOC was introduced in 2004 by the previous government in conjunction with the World Bank, launching nine new regional offices by September 2006, with seed money of US$50million toward establishment of a Micro Credit Fund to provide capital for Ghana’s micro-finance initiatives.

Under the Scheme individuals, groups and businesses were eligible to apply for loans between GH¢100,000 and GH¢250,000.

Groups need to have a minimum of five and maximum of 25 members to access up to GH¢250,000.
Each member of the group can access GH¢10,000, refundable within one year with 10% interest.
Other categories who can access loans from GH¢20,000 to GH¢250,000 attract the going Bank of Ghana prime interest rate.

Gov’t urged to enact CSR policies

Government needs to enact pragmatic policies that will make it attractive for corporate organisations to engage in Corporate Social Responsibility (CSR) programmes, Ms. Ivy Arcos, Africa Representative of the Canada Export Centre, has said.

“Instead of treating corporate entities as ‘cash-cows’ ready to be milked, government should see corporate entities as developmental partners with the resources and capabilities to help government fulfil its social obligations to its citizens.

“For example, government should not hesitate to use the hyper-efficient supply-chains of organisations to deliver aid and assistance to disaster-hit areas.

“In return, government should reward organisations with incentives such as tax-breaks and/or other innovative programmes.”

Ms. Arcos said this at the second annual CSR conference in Accra under the theme “Mainstreaming Emerging Issues of Corporate Social Responsibility into Organisational Behaviour in Ghana”. It was organised by CSR Foundation in collaboration with Global Compact Network Ghana.

“Whereas developed nations like Canada, USA, and Germany have well-structured corporate social responsibility programmes, the reverse is true when it comes to most parts of sub-Saharan Africa,” she said. 

“The benefits of CSR are not just limited to big organisations. As with good corporate governance practices, CSR is equally relevant to smaller companies as, fundamentally, they both draw upon the same universal principles of accountability, honesty, transparency, and sustainability.

“For any CSR programme to really succeed, it is incumbent upon the CEOs, board-members, and senior management like you present today to provide the needed leadership. 

“To achieve lasting success, the attitudes and daily practices of every member of society need to change. As key players in society, businesses can set a powerful example.” 

She explained that the corporate sector has some of the brightest minds in the world, and possesses tremendous financial resources.

In some cases, the corporate sector is also better positioned to mobilise in ways that complement government initiatives. Such moves can be done within the framework of a public-private partnership (PPP).

She commended the Environmental Protection Agency (EPA) for recently establishing a Cleaner Production Centre (CPC) in Tema.

The purpose, she explained, is to encourage industries and companies to go green by providing advice on cleaner production techniques that help to reduce the impact on the environment while maximising profit. In essence, it is to help advance the cause of sustainable development.

Such initiatives demonstrate government’s commitment to promoting sustainable development, she said.

CSR is commonly described by its promoters as aligning a company's activities with the social, economic and environmental expectations of its stakeholders.  

It involves integrating ethical and responsible practices into a company’s business strategies and operations. CSR is not just about what a company does with the profits it makes; it’s about how a company makes its profits in the first place. 

Mr. Benjamin Aryee, Chief Executive Officer, Minerals Commission, explained that the CSR programme in the country is still evolving and that it is a dynamic process of sustainable development.

The Commission, he said, is leading the development of a national framework to define guidelines for mining companies on how to carry out CSR programmes in the country.

Friday, November 9, 2012

Obuasi Mine revival kills 900 jobs

Approximately 900 underground miners at AngloGold Ashanti (AGA)’s Obuasi Mine are expected to lose their jobs today, after the company abrogated its underground development contract with Mining and Building Construction Company (MBC).

The affected workers of MBC, which provides construction and maintenance services to AGA, had been asked to continue working for a 28-day notice period that expires today.

The decision, according to senior managers of AGA, is part of a strategy to revamp the declining Obuasi Mine which employs about 8,500 people directly and indirectly.

“AngloGold Ashanti took the decision in order to secure the viability and long-term sustainability of the Obuasi Mine, which has failed to perform to its potential,” said Kwame Addo-Kuffuor, AGA’s Vice President in charge of Corporate Affairs in Ghana.

“AngloGold Ashanti’s discussions with MBC are now focused on a smooth transition and mitigating the impact on employees. AGA is committed to ensuring that the estimated 900 members of MBC’s workforce directly affected by the termination of the underground development contract receive their due entitlements. The remaining surface contracts at Obuasi between the two parties however remain intact,” he added.

B&FT gathered that the relationship between the two companies dates back over two decades, but was reviewed following the merger between former AngloGold of South Africa and Ashanti Goldfields Company of Ghana in 2004.

The companies since then operated under three-year contracts until 2009, when the renewal of the contracts was changed to a monthly basis.

The Obuasi Mine, which was once the biggest gold mine in the country and the leading employer in the industry, has in recent years become a high-cost producer and has never produced beyond 400,000 ounces since 2004.

The mine has been struggling with over-age equipment, poor security, inadequate power supply, and the activities of illegal miners. Challenges with Obuasi’s underground mining operations, which are carried out by MBC, have also been identified as a key factor responsible for the poor production levels.
Mr. Addo-Kuffuor said these problems have necessitated a restructuring and re-engineering strategy that will involve the recruitment of new skills and labour to undertake the underground development.

But AGA’s decision to abrogate the contract has been met with anxiety by the workforce of MBC.

“Sending all of us home at this time will be a big trouble for us. I don’t know what we are going to do,” said an affected worker who pleaded anonymity.

“I think the government can intervene and talk to AGA to rescind their decision; or better still, we should be paid our entitlement as soon as possible to help us start life all over again.”

Top officials of MBC also want AGA to rescind its decision and resort to dialogue to iron-out the difficult issues for the sake of the workers. But AGA insists it intends to maintain its action as part of Obuasi’s revival and restructuring process.

Peter Anderton, Senior Vice President of AGA Ghana, in a recent interview with B&FT said part of the strategic plan for Obuasi is to invest approximately US$200million next year in the mine, which he reckons is still worth more than 20 years of mine-life and has some 9 million ounces of gold reserves.

“Our core responsibilities for 2012 will comprise modernising and expanding the underground processes with new equipment targetted at significantly improving safety, expanding development of ore reserves, and speeding up ore extraction -- as well as improving recoveries to increase gold production, which is currently just over 300,000 ounces,” he said.  

He said he expected Obuasi to be revived in the next three to five years.

AngloGold Ashanti has 20 operations in 10 countries on four continents, as well as several exploration programmes in both established and new gold-producing regions of the world. 

The company employed 61,242 people, including contractors, in all its operations in 2011 and produced 4.33 million ounces of gold, seven percent (313,000 ounces) of which came from Obuasi. Its capital expenditure globally in 2011 amounted to US$1.5billion, up from the 2010 figure of US$1billion.

As at 31st December 2011, AGA had attributable ore reserves of 75.6 million ounces and attributable mineral resources of 230.9 million ounces, of which Obuasi accounts for 9.3 million ounces and 31 million ounces respectively.